Tag: chapter 7

Figuring the Los Angeles Country median home price size is like trying to calculate the median coin weight when all we have is data about stack size

How to Figure the Los Angeles County Median Home Price (2023)

Posted by Hale Andrew Antico on

How to Figure Los Angeles County Median Home Price (2023 & 2024)

The Los Angeles County median home price in 2023 can be tricky to determine. There are different sources that say different things. It’s not clear which of the many options will be relied upon by courts and trustees for the California homestead exemption.  Also, while bankruptcy may seem to be “just forms,” make sure you check out my list of 12 crucial tips to do or avoid before filing bankruptcy.

2023 update: there seems to be a consensus among local bankruptcy attorneys as to what the Los Angeles County median home price is. More than that, this L.A. median price changes each year. While it’s still untested in court, a lot of the initial uncertainty has cleared up.  Read on!

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Surplus Income, Bankruptcy, and Nonconsumer or Business Debt Avoids the Maze of the Means Test

Nonconsumer Debt + No Means Test = Chap 7 Discharge? A Deep Dive

Posted by Hale Andrew Antico on

Nonconsumer Debt + No Means Test = Chap 7 Discharge? A Deep Dive

A Look at Surplus Income and Nonconsumer Debt, Skipping the Bankruptcy Means Test, and if the Case Law Leads to Chapter 7 Success

Does having primarily nonconsumer debt give someone a shortcut to Chapter 7 discharge? Generally, Chapter 7 is for people who can’t afford to repay debt. There’s a means test that makes someone eligible for Chapter 7. However, there appears to be a loophole that allows someone with primarily nonconsumer debt to skip the means test. Does that shortcut mean high-income debtors with primarily non-consumer debt are on easy street to Chapter 7 discharge?

The Issue: Why Nonconsumer Debt May Help Chapter 7 Discharge

Debt can be categorized as either consumer or nonconsumer. The big difference is if the debt is nonconsumer, you can skip the means test, and squeeze into Chapter 7 bankruptcy.

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median income limits

2023 Median Income Limits to Nail Bankruptcy Means Test in Calif

Posted by Hale Andrew Antico on

Median Income Limits to Nail the Bankruptcy Means Test: New for 2023

The government just updated the numbers for 2023 median income limits. Using median household income, it again got easier to qualify for bankruptcy Chapter 7, because of another means test adjustment.  And while bankruptcy may seem to be “just forms,” make sure you check out my list of 12 crucial tips to do or avoid before filing bankruptcy.

The means test for bankruptcy decides who qualifies for Chapter 7 bankruptcy eligibility. The first step of this process is comparing your median household income against the California median income limits set by the Department Of Justice guidelines to see if you earn less than bankruptcy median income limits.

Again, this comparison against the median income is merely the first step, and does not absolutely determine your eligibility for Chapter 7 or not.

March 2023 Update:  The numbers for the means test adjust April 1, 2023, and will be used after that until late 2023.

Because of the above statement, these will be the second and updated 2023 median income limits.

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Chapter 7 reaffirmation agreement

Chapter 7 Reaffirmation Agreement

Posted by Hale Andrew Antico on

Chapter 7 Reaffirmation Agreement

What is a reaffirmation agreement in Chapter 7

A Chapter 7 reaffirmation agreement is where the evil creditor is trying to get you to owe money after the bankruptcy is over. This is of course a bad thing. But there’s one problem: in some cases, you have to sign the reaffirmation agreement. Note: one advantage of Chapter 13 bankruptcy is no need to reaffirm debts.

2023 Update: Ride-through is back in California bankruptcy, which significantly impacts the requirement to sign a reaffirmation agreement. This is due to the passage of SB 1099, which has a number of changes in California law to help debtors filing bankruptcy.

What does it mean to reaffirm a debt?

To reaffirm a debt is to agree with the lender that you’ll continue owing a debt. You’re basically saying, “I’m good for it.” You’re giving the creditor the power to maybe take things from you and sue you if you ever break the agreement.

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lien in bankruptcy cars

Liens in Bankruptcy: The Ultimate Guide, Explained

Posted by Hale Andrew Antico on

Liens in Bankruptcy: The Ultimate Guide, Explained

Liens in bankruptcy typically survive and don’t get affected by the discharge. However, there are exceptions where the lien can be reduced or even eliminated. I try to break these down in simple terms that are easy to grasp. But don’t be fooled: bankruptcy is more complicated than you think. Get a consultation with an attorney, and make sure you check out my list of 12 crucial tips to do or avoid before filing bankruptcy.

What is a Lien in Bankruptcy?

A lien is a security interest of a debt that encumbers a thing owned by the borrower until the debt is paid. One common example is a car and the car loan. The borrower who “owns” a car can’t just sell the car outright. He has to pay the debt secured by the lien against the car first. Then, once the debt is paid, the lien is satisfied and removed.

Section 101(37) of the Bankruptcy Code defines “lien” as:

charge against or interest in property to secure payment of a debt or performance of an obligation.

How does bankruptcy affect a lien? The General Rule

The general rule for liens in bankruptcy (and there are exceptions) is that bankruptcy doesn’t affect a lien at all. If a debt is secured by a lien and collateral, if you wish to keep the asset, then that debt will survive the bankruptcy. You don’t get a free house or car in bankruptcy. Here, let me put that in a fancy quote because it is so important:

You don’t get a free house or car in bankruptcy.

– Attorney Hale Andrew Antico

Continue reading “Liens in Bankruptcy: The Ultimate Guide, Explained” →

means test for chapter 7 bankruptcy

Bankruptcy Means Test: a calculator, and a trick to pass (2023)

Posted by Hale Andrew Antico on

Bankruptcy Means Test for Chapter 7 in California, and Everywhere Else

Bankruptcy means test for Chapter 7 was created by Congress to decide if you qualify for liquidation or straight bankruptcy.  Here is what it is, some answers to common bankruptcy means test questions, and a weird tip on passing the bankruptcy means test and its median income limits (ok, it’s not weird, but I think you’ll find it helpful).

Historically, there was no bankruptcy income limit

Before 2005, any income earner could, in theory, file Chapter 7 bankruptcy. There was a time in those days where a single person filing bankruptcy could earn $8,000 a month after taxes and still get a discharge. The credit card companies lobbied Congress to change the law and make it harder to qualify. In response, Congress passed a bankruptcy reform called BAPCPA in 2005. One of the new provisions was to add a means test so that the more someone earned, the harder it became to qualify for Chapter 7.

What is the Bankruptcy Means Test

The bankruptcy means test is a long form that asks how much money someone has earned recently. It starts by determining a) what your “current monthly income” is. Then, it compares that to b) a median income limit for their state, for a similar-sized household. If your income is less than the magic number, you pass the means test for Chapter 7.  Consequently, you can file bankruptcy that way.

Figuring Your Current Monthly Income

Once you’ve figured out which income limit number is the standard for your state, you now need to compare against it your current monthly income. And like most things in bankruptcy, this is not as straightforward as it seems.

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Can one person file bankruptcy separately

One Spouse Filing Bankruptcy: Everything You Need to Know

Posted by Hale Andrew Antico on

One Spouse Filing Bankruptcy

All you need to know about one spouse filing bankruptcy individually or separately

Can one spouse file bankruptcy without the other?

Can one spouse file bankruptcy without the other? In consultations, that’s one question I get asked a lot. When we’re married in California, everything is presumed to be joined and shared. So, can a married person claim a bankruptcy? The answer is, “Yes.” Even though someone is married, they have every right to file bankruptcy without the other spouse. They have their own Social Security number and their own credit history. But just because you can do something doesn’t mean you should.

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ride-through california bankruptcy

Ride-Through Back in Calif Bankruptcy

Posted by Hale Andrew Antico on

Ride-Through Back in California Bankruptcy

Ride-through is back in California bankruptcy. This is big news for 2022 and beyond. It restores the right of someone in bankruptcy to be free of personal liability on a car loan in the event of a future default. To be clear, you don’t get a free car in bankruptcy. But if you don’t reaffirm the car debt, and stop paying the car after the bankruptcy discharge resulting in a repo, you won’t owe the deficiency balance.

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Automatic stay and bankruptcy protection

All About the Automatic Stay, the Ultimate Bankruptcy Protection

Posted by Hale Andrew Antico on

All About the Automatic Stay, the Ultimate Bankruptcy Protection

What is the Automatic Stay definition or meaning?

Automatic stay is the bankruptcy protection when a new petition is filed with the court. It protects against starting or continuing any debt collection. It’s a powerful provision, and stops all collection activity, maintaining the status quo on the day the bankruptcy papers are filed. Failure to respect the bankruptcy protection can lead to sanctions against the collecting creditor.

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Remote 341(a) meeting of creditors

Remote 341(a) Meeting & Zoom: What to Expect and How to Prepare

Posted by Hale Andrew Antico on

Remote 341(a) Meeting of Creditors by Zoom: What to Expect in 2023

Zoom 341a Meetings, explained by Los Angeles Bankruptcy lawyer

Remote 341(a) Meetings of Creditors by Zoom in bankruptcy are becoming the standard, instead of in-person. Here’s what to expect. They can be terrifying, nerve-wracking, and unpredictable. But there are ways you can prepare for a Zoom 341a Meeting to help it go more smoothly.

As someone who has attended thousands of 341s in person (after coaching my clients with my list of 12 prefiling do’s and don’ts), I answer your 341(a) questions and share with you what to expect at your 341(a) meeting in a post-pandemic world where Zoom 341(a) meetings are more common, and soon becoming the standard.

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